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SEBI Board may finalise detailed e-IPO norms this month

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The Securities and Exchange Board of India (SEBI) is expected to come up with a detailed guidelines on electronic Initial Public Offers (e-IPOs), where investors can bid for shares through internet.

Why e-IPO?

  • To make things easier for investor to put money in the Initial Public Offering.
  • To give boost to fund raising from capital markets.
  • With the introduction of e-IPO the printing of application forms will be eliminated.
  • It will also help in reducing the overall cost of public issuance and support companies in reaching more retail investors in small towns.
  • Investors would be able to place bids through internet and by using broker terminals across the country without filling long documents.

SEBI had said that extensive and integrated use of technology can facilitate and further ease the investing process in the securities market. Under the new norms, investors may also get SMS/e-mail alert for allotment under the IPO, similar to alerts being sent to investors for secondary market transactions.

Initial Public Offering

IPO is the first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand.